16 June 2026
The Low Incomes Tax Reform Group (LITRG) has published a press release calling for action from HM Revenue and Customs (HMRC) to investigate the true scale to which employers are incorrectly applying tax relief to their pension schemes. If left unchecked, these errors could hinder the effectiveness of the new pension top-up payment scheme for low earners, soon to be rolled out.
This is a complex issue and data gathered to try and determine who should benefit from the new scheme that introduces an automatic top up payment for low earners, could be wrong or misleading. Typically, employees paying into a pension scheme should receive tax relief on their pension contributions equivalent to the highest rate of income tax they pay for their earnings. But it seems that some employers are getting confused about the different types of pension tax relief meaning that employees are not receiving what they are entitled to.
It has been suggested that confusion could be caused by the way in which the tax relief types are named, and other pension terminology. It may also be the case that employers may be unsure how to resolve errors that they do find, and that HMRC does not have on record which schemes, whether a ‘Net Pay Arrangement’ or a ‘Relief at Source’, are allocated to which individuals.
Here at the CIPP we have lots of resources for you to use to brush up on your knowledge, including our BeKnowledgable event tomorrow (17 June 2026) at 11am with a member of our Policy Team, Georgie Ward. Be sure to attend if you are one of our Full, Fellow or Chartered Members.
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